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Bit Digital, Inc. Announces Finalized Terms for Contract Expansion with Major HPC Customer; Total Contract Value Now Worth Approximately $275 Million

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Bit Digital, listed on Nasdaq under BTBT, has finalized a significant contract expansion with a major High-Performance Computing (HPC) customer. The agreement involves supplying an additional 2,048 GPUs over three years, bringing the total to 4,096 GPUs for the period. This contract is valued at approximately $275 million, equating to $92 million annually.

Bit Digital has ordered 256 servers from Dell Technologies, equipped with Nvidia HGX H100 GPUs, expected to be delivered in July 2024 and operational by August 2024 in Iceland. The company plans to finance this deal through a combination of cash and digital assets. Additionally, a sale-leaseback agreement for 1,024 GPUs will reduce upfront costs, and the company is exploring further debt financing options.

This expansion aligns with Bit Digital’s goal of achieving a $100 million annualized revenue run-rate by the end of 2024, covering over 90% of this target. CEO Sam Tabar highlighted the company’s commitment to supporting customer AI ambitions and scaling the HPC segment.

Positive
  • Contract expansion valued at $275 million, or $92 million annually.
  • Deployment of 4,096 GPUs over three years.
  • Order of 256 servers from Dell Technologies with Nvidia HGX H100 GPUs.
  • Expected revenue generation starting in August 2024.
  • Sale-leaseback for 1,024 GPUs reducing capital outlay.
  • Aligned with achieving a $100 million annualized revenue run-rate by end of 2024.
Negative
  • Potential risk associated with financing through debt options.
  • Operational dependency on delivery and deployment timelines.

Insights

Bit Digital's recent contract expansion with a major HPC customer stands out as a noteworthy development. The finalized agreement of $275 million over three years translates to an annual revenue of $92 million, which brings the company close to its stated goal of $100 million in annualized revenue. This growth trajectory is impressive, particularly given the firm's strategic use of both cash and digital assets to finance the deal.

From a financial perspective, the use of a sale-leaseback agreement for 1,024 GPUs is a smart move. It reduces the immediate capital outlay, allowing for more liquidity and flexibility. Importantly, the company is also evaluating debt financing options, which could offer further financial leverage and reduce the strain on their balance sheet.

In the short term, investors can expect a positive impact on revenue and possibly stock price, given the significant boost in annual revenue. However, potential risks include the ability to effectively manage such a large-scale deployment and the future success of their AI infrastructure business.

Overall, this news points to a strong financial health and an aggressive growth outlook for Bit Digital.

The agreement to supply 4,096 GPUs, specifically Nvidia HGX H100 GPUs, to a major HPC customer is a significant win for Bit Digital's technological portfolio. Nvidia HGX H100 GPUs are among the most advanced in the market, tailored for high-performance computing (HPC) and artificial intelligence (AI) workloads, which align well with Bit Digital's AI infrastructure focus.

The decision to deploy these GPUs in Iceland, leveraging the existing datacenter infrastructure, suggests a keen eye on operational efficiency and sustainability. Iceland is known for its renewable energy sources and cool climate, which are ideal for running energy-intensive AI and HPC operations.

This strategic move not only strengthens Bit Digital's position in the AI infrastructure space but also reinforces their commitment to sustainable and high-performance technology solutions. Investors should view this with optimism as it indicates robust technological advancements and operational prudence.

Bit Digital's announcement of a substantial contract expansion highlights a significant growth opportunity within the high-performance computing (HPC) market. The value of the contract, pegged at $275 million, is a testament to the increasing demand for advanced computational power driven by AI and machine learning initiatives. This deal not only solidifies Bit Digital's foothold in the HPC market but also reflects broader industry trends towards robust AI infrastructure investments.

The deployment of 4,096 Nvidia HGX H100 GPUs positions Bit Digital as a key player capable of meeting the rising computational needs of AI-driven enterprises. This move aligns with global trends where companies are increasingly seeking high-performance and energy-efficient solutions to support their AI ambitions.

For retail investors, this development signals a positive shift in Bit Digital's market positioning and potential for increased market share. The company's proactive approach to utilizing cutting-edge technology and strategic financial maneuvers could pave the way for sustained growth and competitive advantage in the rapidly evolving AI infrastructure sector.

NEW YORK, June 25, 2024 /PRNewswire/ -- Bit Digital, Inc. (Nasdaq: BTBT) ("Bit Digital" or the "Company"), a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York, announced today that it has finalized an agreement to supply an existing customer with an additional 2,048 GPUs over a three-year term commencing upon deployment. With this agreement, the Company will supply this customer with a total of 4,096 GPUs for the respective three-year periods, amounting to total revenue of approximately $275 million, or $92 million on an annualized basis.

To fulfill the contract, the Company has placed a purchase order for 256 servers manufactured by Dell Technologies, an authorized Nvidia OEM, that are equipped with 2,048 Nvidia HGX H100 GPUs along with related equipment, which are expected to be delivered to the Company during July 2024. The servers will be deployed in Iceland at the datacenter where the Company's existing AI servers are located and are expected to begin generating revenue in August 2024.

The Company intends to finance the deal with a mixture of cash and digital assets on the balance sheet. Bit Digital has elected to enter into a sale-leaseback agreement with a third-party entity for 1,024 GPUs which will reduce the Company's capital outlay commensurately. Additionally, the Company continues to evaluate debt financing options that would allow the Company to retroactively finance its hardware assets.  

Sam Tabar, Bit Digital's CEO, commented: "We are pleased to finalize terms with our customer to expand their deployment to over 4,000 GPUs. This agreement significantly contributes to our goal of reaching a $100 million annualized revenue run-rate by the end of 2024, bringing us to over 90% of this target. Our primary objective in the HPC business is to execute effectively for our customers and help them achieve their AI ambitions. We continue to see a robust growth trajectory for this segment and look forward to scaling even further as the year progresses."

About Bit Digital

Bit Digital, Inc. is a sustainable platform for digital assets and artificial intelligence ("AI") infrastructure headquartered in New York City. Our bitcoin mining operations are located in the US, Canada, and Iceland. The Company has established a business line, Bit Digital AI, that offers infrastructure services for artificial intelligence applications. For additional information, please contact ir@bit-digital.com or visit our website at www.bit-digital.com.

Investor Notice

Investing in our securities involves a high degree of risk. Before making an investment decision, you should carefully consider the risks, uncertainties and forward-looking statements described under "Risk Factors" in Item 3.D of our most recent Annual Report on Form 20-F for the fiscal year ended December 31, 2023. If any material risk was to occur, our business, financial condition or results of operations would likely suffer. In that event, the value of our securities could decline and you could lose part or all of your investment. The risks and uncertainties we describe are not the only ones facing us. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. In addition, our past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results in the future. Future changes in the network-wide mining difficulty rate or bitcoin hash rate may also materially affect the future performance of Bit Digital's production of bitcoin. Actual operating results will vary depending on many factors including network difficulty rate, total hash rate of the network, the operations of our facilities, the status of our miners, and other factors.

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of Bit Digital, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects," or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website at http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/bit-digital-inc-announces-finalized-terms-for-contract-expansion-with-major-hpc-customer-total-contract-value-now-worth-approximately-275-million-302180889.html

SOURCE Bit Digital, Inc.

FAQ

What is the total value of Bit Digital's new contract?

The total value of the new contract is approximately $275 million.

How many GPUs will Bit Digital supply to its HPC customer?

Bit Digital will supply a total of 4,096 GPUs over a three-year period.

When will Bit Digital's new servers be delivered and deployed?

The servers will be delivered in July 2024 and are expected to begin generating revenue in August 2024.

How will Bit Digital finance the new contract?

Bit Digital plans to finance the deal through a mix of cash and digital assets, a sale-leaseback agreement for 1,024 GPUs, and is evaluating further debt financing options.

What is Bit Digital's revenue target for 2024?

Bit Digital aims to achieve a $100 million annualized revenue run-rate by the end of 2024.

Where will Bit Digital deploy the new servers?

The new servers will be deployed in Iceland at the datacenter where Bit Digital's existing AI servers are located.

How does the contract expansion affect Bit Digital's revenue target?

The contract expansion brings Bit Digital to over 90% of its target to achieve a $100 million annualized revenue run-rate by the end of 2024.

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